Public Bill Committee

[Mr Graham Brady in the Chair]

Graham Brady: Before we begin, I have a few preliminary announcements. Given the sunny, warm weather Members may remove their jackets during the meeting if they wish. I remind all Members to ensure that mobile phones, pagers and suchlike are turned off or switched to silent mode during Committee sittings. Also, as a general rule, I and my fellow Chair do not intend to call starred amendments—those which have not been tabled with adequate notice. The required notice period in Public Bill Committees is three working days. Therefore amendments should be tabled by the rise of the House on Monday for consideration on Thursday and by the rise of the House on Thursday for consideration on Tuesday. There is a money resolution in connection with the Bill and copies are available in the room.
Not everyone is familiar with the procedure in Public Bill Committees so I will briefly explain how we will proceed. The Committee will first be asked to consider the programme motion, for which debate is limited to half an hour. We will then proceed to a motion to report written evidence. Then we will begin line-by-line consideration of the Bill.

Steve Webb: I beg to move,
That—
(1) the Committee shall (in addition to its first meeting at 10.30 am on Tuesday 5 July) meet—
(a) at 4.00 pm on Tuesday 5 July;
(b) at 9.00 am and 1.00 pm on Thursday 7 July;
(c) at 10.30 am and 4.00 pm on Tuesday 12 July;
(d) at 9.00 am and 1.00 pm on Thursday 14 July;
(e) at 10.30 am and 4.00 pm on Tuesday 19 July;
(2) the proceedings shall be taken in the following order: Clause 1; Schedule 1; Clause 2; Schedule 2; Clause 3; Schedule 3; new Clauses relating to Part 1; new Schedules relating to Part 1; Clauses 4 to 14; new Clauses relating to Part 2; new Schedules relating to Part 2; Clauses 15 to 18; Schedule 4; Clauses 19 to 24; new Clauses relating to Part 3; new Schedules relating to Part 3; Clauses 19 to 24; new Clauses relating to Part 3; new Schedules relating to Part 3; Clause 25; Schedule 5; new Clauses relating to Part 4; new Schedules relating to Part 4; Clauses 26 and 27; remaining new Clauses; remaining new Schedules; Clauses 28 to 30; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on Tuesday 19 July.
I am sure that we will all enjoy serving under your chairmanship over the coming days and weeks, Mr Brady. There are two main strands to the Bill—a change to the state pension age designed to take account of the changes in longevity, and refinement to the process of auto-enrolment into workplace pensions.
The topic of state pension age has attracted most attention and is clause 1 of the Bill, so it is inevitably our focus this morning. However, we hope that proper attention will also be given to issues of auto-enrolment, which were thoroughly and helpfully debated in another place. The Committee will be aware that we will require new things of judges; that was less contentious at this end of the corridor than the other end of the corridor. I am sure Mr Brady would prefer us to spend most of the time today talking about the Bill and its measures rather than the programme motion, so I commend the motion to the Committee.

Question put and agreed to.

Ordered,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Steve Webb.)

Graham Brady: Copies of the memorandums that the Committee receives will be made available in the Committee room.

Clause 1  - Equalisation of and increase in pensionable age for men and women

Rachel Reeves: I beg to move amendment 16, in clause1,page1,line6,leave out ‘“December 1953”’ and insert ‘“April 1955”’.

Graham Brady: With this it will be convenient to discuss the following: amendment 17, in clause1,page1,line7,leave out subsection (3) and insert—
‘(3) In sub-paragraph (4) leave out “6 April 1959” and insert “6 April 1955”.
Amendment 18, in clause1,page1,line9,leave out subsection (4).
Amendment 19, in clause1,page2,leave out lines 10 to 16 and insert—
‘6th April 1955 to 5th May 1955
6th May 2020
6th May 1955 to 5th June 1955
6th July 2020
6th June 1955 to 5th July 1955
6th September 2020
6th July 1955 to 5th August 1955
6th November 2020
6th August 1955 to 5th September 1955
6th January 2021
6th September 1955 to 5th October 1955
6th March 2021
6th October 1955 to 5th November 1955
6th May 2021
6th November 1955 to 5th December 1955
6th July 2021
6th December 1955 to 5th January 1955
6th September 2021
6th January 1956 to 5th February 1956
6th November 2021
6th February 1956 to 5th March 1956
6th January 2022
6th March 1956 to 5th April 1956
6th March 2022’.
Amendment 20, in clause1,page2,line17,leave out ‘1954’ and insert ‘1956’.
Amendment 21, in schedule 1,page20,line19, leave out paragraph (6) and insert—
6 In section 126 of the Pensions Act 1995 (equalisation of and increase in pensionable age etc.) in paragraph (a) delete “2024” and replace with “April 2020”.’.
Amendment 22,in schedule 1, page20,line31, leave out ‘December 2018’ and insert ‘April 2020’.

Rachel Reeves: Like the Minister, I look forward to serving under your chairmanship for the duration of the Committee, Mr Brady, and to working with Members from both sides of the House as we work through the Bill.
While I welcome some aspects of the Bill, the purpose of this group of amendments should be clear. Collectively, they seek to amend the Bill’s acceleration of the equalisation of the state pension age for men and women and ensure that there is no rise to age 66 before 2016 for men and 2020 for women, as in the coalition agreement, but allow for a faster increase to 66 between 2020 and 2022. Clause 1 preserves the existing timetable set out in the Pensions Act 1995, which means that women will reach pensionable age at 65 if born after 5 April 1955. For women born between 6 April 1950 and 5 April 1955, state pension age will gradually increase over a decade—and indeed, has started to do so—rising one year in every two. Our amendment brings forward the increase for men and women to 66, accelerating that by four years to between 2020 and 2022 rather than between 2024 and 2026. That will ensure that a decent notice period is given, that men and women are affected equally, and that no single person has their state pension delayed by more than a year. This amendment brings to the table changes for which so many people have campaigned tirelessly over the last few months. I would like to express my gratitude to Age UK, which organised a mass lobby of Parliament for those women affected, and to Saga, which organised an online petition and has done so much lobbying. Age UK has also published an excellent yearbook that puts names and faces to the statistics and numbers that we shall be debating today.
The amendments make no specific proposals to change the current timetable for increasing the state pension age to 67, and then to 68, as legislated for in the Pensions Act 2007, although we accept—as do the Government, I believe—that increasing longevity will eventually cause those to be revisited. I welcome the Green Paper and the outcome of the consultation of a more systematic mechanism for uprating the state pension age in the future. As I am sure the Minister will agree, the state pension age needs to rise in order to pay for a more generous basic state pension, linked to earnings. That principle was established by the Labour Government in 2007, as part of the implementation of the Turner review, and is one that we continue to support.
We do not challenge the life expectancy projections that the Government have used to underpin their policy changes, and we understand that life expectancy has increased, even since the Turner report. Average life expectancy for those who reach 65 in 2026 has increased by 1.5 years for men and 1.6 years for women. It is therefore reasonable that the Government took the state pension age to review when assuming office over a year ago. However, in the coalition agreement the Government were clear that they would review the state pension age, but that it would not start to rise to 66 before 2020 for women and 2018 for men. Yet the timetable set out in the Bill, as hon. Members know, sees women’s state pension age start to rise to 66 in 2018. What new evidence has the Minister seen since the coalition agreement was signed, that has caused this U-turn?
We know that the timetable proposed in the Bill will affect some 4.9 million people: 2.6 million of them are women, 2.3 million are men. But most worryingly—this is the cause that so many people have taken up—500,000 women will have to wait more than a year to receive their state pension, and of those, 300,000 women will have to wait 18 months or more. Thirty-three thousand women unlucky enough to have been born between 6 March 1954 and 5 April 1954 will have to wait exactly two years longer before they receive their state pension. A delay of two years translates to a loss of income of over £10,000 for all recipients of the basic state pension. For those in receipt of pension credit, that figure is nearer to £15,000.

Lilian Greenwood: Can my hon. Friend tell me whether she has also included, in the figures on the loss of pension that someone might expect to suffer, some of the passported benefits that go alongside the state pension, such as winter fuel allowance, free bus travel, free prescriptions and free dental care? Have those been taken into account in determining the loss for that group of women?

Rachel Reeves: I thank my hon. Friend for that intervention. Of course, it is not only women who will lose out because of the increase in the state pension age. At the moment, passported benefits track the women’s state pension age, so the free bus pass is available to men and women in accordance with the women’s state pension age. Both men and women will lose out on some of the passported benefits that my hon. Friend mentioned because of these changes. My hon. Friend mentioned bus passes, but there are a whole range of benefits, including help with council tax, housing benefit and the winter fuel allowance. An answer to a parliamentary question shows that as a result of these plans, for example—

Alok Sharma: Has the hon. Lady come up with the cost of her proposals, and how does she expect to fund them? Interestingly, we had a similar debate on Second Reading, and never got an answer from the Opposition on how they would fund the changes they were proposing. It is a simple question: what is the value of these changes, and how would you fund them?

Rachel Reeves: I am unsure whether the hon. Gentleman was there for the entire debate, or has read Hansard, because I set out Labour’s alternatives very clearly, as did the shadow Secretary of State for Work and Pensions. They are backed by Age UK and Saga. The Opposition propose that we stick with the current equalisation timetable—equalise men and women’s state pension age to 65 in 2020—but then increase the state pension age for men and women to 66 between 2020 and 2022, bringing that forward by four years. The Government’s proposals save £30 billion; our proposals save £20 billion. As hon. Members from all parts of the House have said, however, there is also the possibility of bringing forward the increase to 67 and 68, which we asked the Government to look at. Answers to parliamentary questions show that that would save significantly more than the Government’s proposals.

Alok Sharma: Will the hon. Lady give way?

Rachel Reeves: Let me just finish my point. The Government have set out to eliminate the Budget deficit within this Parliament; the Opposition have set out to halve it. Neither proposal has any impact on eliminating the Budget deficit, because none of these savings kicks in until 2016 at the earliest, and they cover a 10-year period between 2016 and 2026. We must ensure that state pensions are sustainable, but the changes that we have proposed will make savings over time, and they start to kick in just two years later. Critically, our changes mean that nobody has to wait for more than a year longer before they receive their state pension; they affect an equal number of men and women; and they mean that people get at least nine years’ notice of any changes to their state pension age.
The proposed changes in the Bill will kick in in 2016 when the state pension age changes. For that reason it is right to look specifically at the 500,000 women who will have to wait for more than a year longer before they receive their state pension, as Members from all sides of the House said on Second Reading. Yes, we need to make savings, but I would like to see that done in a fairer way that impacts men and women equally, gives people fair notice and does not require anyone to wait for more than a year longer before they get their state pension.
On Second Reading, the Secretary of State for Work and Pensions and the Pensions Minister said that transitional arrangements would be looked at. We would like to see those arrangements, but the Government have not tabled any amendments for us to consider in Committee. I do not think that that was the expectation of many Members, from all parties, when we discussed this on Second Reading.

Alok Sharma: We will hear from the Minister on the points that the hon. Lady raised in due course. I would like to make two points. First, with regard to halving the deficit, I am delighted that she has at least started to talk about that, or reducing part of it. It would be very interesting to hear in another debate, perhaps from the shadow Chancellor, exactly which areas the Opposition are talking about cutting. We have not had that spelt out, so it will be interesting to hear.
Secondly, returning to the cost of her proposals, the hon. Lady made it absolutely clear that on Second Reading we talked about the Government’s proposal to save £30 billion and the Opposition’s proposal to save £20 billion. There is a £10 billion hole, and in all that she has said I do not think that the hon. Lady has explained how that shortfall will be made up.

Rachel Reeves: The £20 billion is a saving compared to the current Budget, as is £30 billion, but neither meets the target of eliminating the Budget deficit in this Parliament. We are willing to look at proposals that cost less money. My hon. Friend the Member for Erith and Thamesmead has proposed amendments that cost less than the amendment that we are currently debating. We have not, however, had any proposals from the Government about how they can support these 500,000 women. [ Interruption. ] Will the hon. Gentleman let me conclude?
Life expectancy has increased, but as I said earlier, it has increased by 1.5 years for men and 1.6 years for women since the state pension age was last examined. Thirty-three thousand women are being asked to work for two years longer and 300,000 women are being asked to work for 18 months longer. Why are 500,000 women being asked to bear so much of the burden for this policy, and why are they being asked to work for longer than the increase in their life expectancy? I am not saying that change is not needed; I recognise, as the Turner report set out, that the state pension age must increase as people are living longer. I want to work with the Government on fairer proposals, but we have not seen the transitional arrangements. We are proposing an amendment that is fairer, makes £20 billion of savings, and affects an equal number of men and women. It also gives people that nine-year notice period. In the absence of the extremely disappointing absence of any firm proposals from the Government, this proposal is a way of saving money, but also treats people fairly.

Alok Sharma: I will intervene one last time. The hon. Lady is being slightly disingenuous. She has acknowledged the fact that the Government are talking about £30 billion of savings and the Opposition are talking about £20 billion, so there is a £10 billion shortfall and she has not explained to the Committee where that £10 billion shortfall will be made up. I look forward to hearing throughout the next few days how she is going to come up with that figure.

Rachel Reeves: rose—

Graham Brady: Order. Before the hon. Lady replies, I do not mind at all if she subtly wants to weave in reference to the overall strategy for budget discipline and deficit reduction, but I hope we are not going to divert entirely on to a debate on that subject rather than on the amendment.

Rachel Reeves: I plan very much to speak to the terms of this Bill, but this is outside the period of the comprehensive spending review and the budget deficit reduction plan. As I have said, we are willing to look at other proposals, but the Government have not tabled any. We are also willing to look at increasing the state pension age to 67 and 68, which if brought forward by one year—I will come on to some of these numbers later today—will save £7 billion, and if by two years, around £13 billion. So there are other ways of addressing increasing longevity that I believe are fairer, but will also save money.
The critical point that so many hon. Members in all parts of the House raised on Second Reading is the unfairness to this specific group of women. So while hon. Members from all parties said that yes, we need to increase the state pension age—I said it in my speech, the shadow Secretary of State for Work and Pensions said it in his—I want to find a fairer way of doing so, which gives people the notice period they need to make plans for their retirement.
I was hoping, given what the Secretary of State and the Pensions Minister said on Second Reading, that those transitional arrangements would be brought to this Committee, but the Government have not done so. That is extremely disappointing.

Harriett Baldwin: I thank the hon. Lady for giving way and I declare an interest, as a woman born in 1960. The hon. Lady has alluded on a couple of occasions to 500,000 women who are affected by this Bill and to 33,000 women who are being asked to work more than two years. Would she not agree that the vast majority of women are being asked to work for at least two years longer, and what does she propose to do about that group of women?

Rachel Reeves: Well, at the beginning I said that 4.9 million people are affected by the Bill—2.6 million women and 2.3 million men. Of that 4.9 million affected, 500,000 people are having to wait more than a year longer, 300,000 for more than 18 months and 33,000 for exactly two years longer. Everybody believes that people need to work longer to have an affordable state pension. That was set out by the Turner report and I continue to support that, as do all Opposition Members.
The issue is around those 500,000 women and why I and so many hon. Members who spoke on Second Reading believe that it is unfair that this group of women are particularly impacted.

Harriett Baldwin: The hon. Lady referred to a particular group of women and I am curious to understand. The Bill is in effect about drawing a line somewhere. The hon. Lady is proposing that a line be drawn in a different place. Would that not raise questions for other groups of people?

Rachel Reeves: I am sorry; I understand the point now. The proposals that we have put forward are: no further change until 2020 to keep with the current equalisation timetable, then between 2020 and 2022 increase the state pension age between 65 and 66 for both men and women. I have the impact assessment here and I can check the exact numbers, but I think 1.3 million fewer people are affected by that timetable. Crucially, an equal number of men and women are affected. Nobody has to wait more than a year longer before they get their state pension, so obviously no one has to wait two years longer. Those changes also give people nine years’ notice, so they affect fewer people. Nobody has to wait for more than a year and it gives people a notice period which enables them to adjust their financial and working plans to adapt to the changes. Did the hon. Lady want to come in again?

Harriett Baldwin: Just to clarify that there will always be a group of women with some level of birth date who will have to work for more than two years longer.

Rachel Reeves: No. The hon. Lady is not correct on that. In the impact assessment, the Government set out two different ways in which they could increase the state pension age. The first is the way that the Government are pursuing, which, as I say, impacts 4.9 million people, 500,000 for more than a year. The second proposal that the Government put forward in their earlier consultation would mean, as I am proposing, that there are no changes before 2020 and we stick with the current equalisation period. The reason that women are having to wait for more than two years longer is that two things are happening at the same time: bringing forward equalisation and increasing the state pension age all within the same period of time. That is why people will have to wait up to two years longer and more than a year longer.
If you kept with the current equalisation timetable then increased the state pension age from 65 to 66 between 2020 and 2022, 3.6 million people would be impacted by that change—1.3 million fewer than under these proposals—and nobody would have to wait for more than a year longer before they got their state pension. An equal number of women and men are affected.
One of the crucial points is that that would give people an adequate notice period. Lord Turner, in his report, recommended a 15-year notice period. The Pensions Policy Institute recommended a 10-year notice period. These changes kick in in five years, and the women most impacted—those who have to wait for two years longer—have seven years’ notice. Most experts believe that that is not sufficient time. We can come on to some of the details about the working patterns of women in their late 50s and early 60s, but many of these women have already taken on caring responsibilities, either for elderly parents or young grandchildren. Some of these women, as my hon. Friend the Member for Aberdeen South (Dame Anne Begg) and the hon. Member for Chippenham (Duncan Hames) said on Second Reading, have taken redundancy pay, particularly perhaps from local government, in anticipation of their state pension kicking in at 63 or 64. They have done all the financial planning around that and then they have seen the goalposts moved again.
Critically, under the proposals that I am putting forward, nobody has to wait for more than a year longer before they receive their state pension, although of course people would still be affected by these changes, as they were by the changes that the Labour Government legislated for and the previous Conservative Government legislated for in 1995. They are the right things to do. As longevity increases it is right that people work longer and wait longer before they get their pension. As a result they get a more generous pension, certainly under the Turner recommendations, than they would have done previously. However there is a specific issue about those 500,000 women and asking people to wait for more than a year longer with such short notice.

Marcus Jones: I thank the hon. Lady for giving way; she has been very generous in taking interventions. In relation to the state pension—the hon. Lady has just said that it is important that our pensioners receive a better state pension—would she not acknowledge that the coalition Government have actually increased the state pension by introducing the triple lock guarantee? Therefore pensioners who are retiring will receive up to £15,000 more during their time receiving a pension than they would have under the Labour Government.

Rachel Reeves: I would say two things to that. As the hon. Gentleman knows, when Turner reported he recommended that three things were done—first, that the state pension age was increased; secondly, that the earnings link was restored; and thirdly, that automatic enrolment was introduced. As a result, we legislated for those three things to happen. As the hon. Gentleman knows, automatic enrolment kicks in next year. Under Labour’s plans, the earnings link was to be restored in 2012. The Minister knows that.

Marcus Jones: Will the hon. Lady give way?

Rachel Reeves: Let me finish the point that I am making; then I will give way. The earnings link was to be restored in 2012. So there was automatic enrolment, the earnings link, and the state pension age was to be increased to 66 between 2024 and 2026; then to 67 between 2034 and 2036 and to 68 between 2044 and 2046. They were the three components of the Turner report that the Labour Government implemented. It did not happen within our time in office but was legislated for and was to happen before the increases in the state pension age and at the same time that automated enrolment was introduced. It is right that people wait longer for their pension, particularly if that pays for a better pension when they get there.
The £15,000 difference is the difference between the triple lock and keeping with the old inflation index. It is not a difference between what would have happened under a Labour Government and what is happening under the coalition agreement. It is the difference between inflation uprating—which was in no party’s manifesto—and the triple lock. I do not accept the point that pensioners are £15,000 better off under this Government. They are better off with the triple lock than with the old inflation linking, but continuing with the inflation linking was not in anyone’s manifesto commitment.
I also say to the hon. Gentleman that it is not really much consolation to the 500,000 women who will be without their state pension for a year, and particularly not much consolation to the 33,000 women who will be without their state pension at either the earnings-uprated or inflation-uprated level. The poorest women, on full pension credit, will miss out on £15,000 if they lose their state pension for two years, and that is before the passported benefits that my hon. Friend the Member for Nottingham South mentioned earlier are taken into account. For those two years, many of these women have very few savings to draw on. The average woman aged 57 has £9,100 pension savings and 40% of these women have no private pension savings, so they are very reliant on the basic state pension and in many cases, the pension credit as well.
It is very difficult to know how those women will get by for those two years. Many will continue to work but some are not in a position to do so. Many have already made decisions about their working hours, cutting them back to care for elderly parents or young grandchildren. Many have taken redundancy payments based on financial calculations. What I particularly object to in the Bill is the fact that people have had so little notice. With all the will in the world, there is no way that those women can make up what they will lose within that six or seven-year period. They might get a better pension in the long run, compared with the inflation link rather than compared with the previous Labour Government, but that is not a huge consolation for women during that period of time.
 Steve Webb  rose—

Rachel Reeves: I shall make one more point before I give way to the Minister. Everyone benefits from the restoration of the earnings link, or the triple lock. Why do a group of women have to pay a particularly harsh price so that everybody—you, me, a 52-year-old woman, a 62-year-old man, all of those people—can benefit from the restoration of the earnings link? Why are we asking 500,000 women to pay the price of restoring the earnings link for everybody? To pay for a better state pension in retirement we need to increase the state pension age, but I do not see why that should be done in a way that disproportionately hits that group of women, who have so little time to prepare for it.

Steve Webb: I am sure that the hon. Lady would want her speech to be based on fact rather than assertion. She is talking about the particular group affected by the clause and the amendment. She said:
“Many of them will have taken redundancy payments.”
Can she tell us how many?

Rachel Reeves: No, but if the Minister has that information to hand that would be useful. On Second Reading I commented on two points made by my hon. Friend the Member for Aberdeen South and the hon. Member for Chippenham, who talked about people in their constituencies who had made these decisions—[ Interruption . ]

Rachel Reeves: If the Minister wants to supply that information—[ Interruption . ] It was a point made on Second Reading and it is about putting faces to some of these statistics. We know that these women are in a number of different situations. Many women have written to us about caring for elderly parents, supporting their sons and daughters going back to work while taking on child care responsibilities for them. Other women have written to us saying that they took redundancy payments from work. I have received letters like that, and clearly those two Members who spoke Second Reading had as well. Those women have done their financial calculations based on when their state pension would kick in, and when their occupational pension—if they were lucky enough to have one—would kick in.
The central point is about the time we are giving people to prepare for these changes. If people are given 10 years’ notice, they can adapt their plans. They can build up savings, adjust their hours at work or adjust their caring responsibilities. But to make these changes that kick in in 2016 with just five years’ notice—seven years’ notice to the people most impacted by these changes—is unfair. The hon. Gentleman, and Members from both sides of the House have received the yearbook, “Class of 53/54” from Age UK, which sets out six or seven accounts of individuals affected. Everyone has their own story to tell; I could give some stories from constituents of mine, as I am sure all hon. Members can. The point is that with just five or seven years’ notice to plan, it is very difficult for that group of women to adjust their plans, whatever those plans, set in motion, were. If people are given more notice, it is more likely that they can adjust those plans, and that is why Turner recommended 15 years’ notice, as the hon. Gentleman knows.

Hywel Williams: The pertinent point here is that 3.4 million carers are women, and one in five carers are aged between 54 and 60, and that is the peak time for caring. That is the group that will be impacted by these proposals.

Rachel Reeves: I thank the hon. Gentleman for that point and those statistics. Again, the point about carers is a key one, and was raised by other hon. Members on Second Reading. It is another reason for the Government to come back with some transitional arrangements to particularly help that group of 500,000 women who have to wait for more than a year longer. All of us know, from our constituencies, women who say: “I’ve done all the right things; I’ve brought up my family, I’m trying to help my daughter go back to work by doing the child care two days a week, while also juggling work.”

Alok Sharma: rose—

Harriett Baldwin: rose—

Rachel Reeves: I will give way in a moment to both hon. Members, but let me finish the point. These women are trying to do the right thing, but they feel that the pension age is like a horizon, always in the distance, and they can never reach it. The goalposts have moved again, but not with sufficient time to enable them to adjust their plans.

Alok Sharma: The hon. Lady acknowledged in her opening remarks that we are living longer, and changes are being made to the pensions system that were made under her Government, and will be made under this Government. I would like to take her back to what was said to the TUC in September 2004 by the then Secretary of State for Work and Pensions, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson). He categorically said:
“This Government will not raise the state pension age.”
Yet, in 2005, Labour’s own pensions commission said that the age should go up, and in the Pensions Act 2007, as she said herself, Labour legislated to increase it for men and women. Does she think that it was unfair that Labour changed the goalposts at that time?

Rachel Reeves: I do not have the benefit of seeing the information that the hon. Gentleman has seen, but I think there is a consensus across the House that the state pension age needs to increase as people live longer. I want to build consensus, as Labour did in the Pensions Acts 2007 and 2008, because that is the right way to approach pensions policy. We can all look for division, which is what the hon. Gentleman is doing, but I want to build consensus. Labour, in 2007 and 2008, built a cross-party consensus to implement the Turner review, and as a result we had changes that made the system fairer and more sustainable, and will bring more people into pensions savings through automatic enrolment. I would like this Government to approach pensions reform in the same manner, because if we do that we can build a fairer policy, and a sustainable system. But consensus is, and was, hard won. There were negotiations to be had with business about automatic enrolment, and with the trade unions about the state pension age. Labour took on those arguments, and built a consensus across the trade unions, who recognised the need to increase the state pension age, and with the business community, who by and large supported automatic enrolment. I believe that the Government are beginning to unravel that hard won consensus. They are doing so by trying to bring forward changes at a rate that does not allow people to prepare, and particularly penalises a group of women who I think we all believe will be unfairly impacted.

Harriett Baldwin: I thank the hon. Lady for giving way; she has been extremely generous with her time. Did she see the article by Alice Miles published in the  New Statesman recently? It is not a publication that is normally very friendly to the coalition Government’s policies, but the article said:
“The half a million or so women whose cause is being championed particularly loudly at the moment are not the only ones who will be caught by the higher pension age. They are simply the ones who have been given a bit less notice of it. For those in work, however, seven years is a reasonable warning time. I keep hearing that the time frame isn't long enough to enable them to plan financially. Plan for what? They should just keep working.”
What does the hon. Lady say to that?

Rachel Reeves: First, I do not believe that the article is correct in the assertion that these women are impacted by the same amount of time as other people. As we all know—though I am unsure if the journalist recognises it—those 500,000 women have to wait for more than a year longer, which nobody else will have to do. That is a key point that the journalist perhaps failed to take on board. I will expand my answer, and if the hon. Lady still has questions then she can come back.
We know that many of these women have already shifted their hours to part-time work. That was in the impact assessment. Many of these women are already working part time, and have made that decision based on assumptions about when their state pension, or any occupational pension, would kick in. They have done the financial planning, and the letters that we received back up the evidence that we saw in the impact assessment. As Age UK says, women start working part time, in anticipation of retirement, much earlier than men. This is because, as the hon. Member for Arfon mentioned, it is predominantly this group of women that takes on caring responsibilities. I am sure that we all have examples from our own families of women in their late 50s or early 60s acting as carers for their parents or grandchildren. I do not accept, therefore, the idea that these women can just carry on working. They are continuing to work, not just in paid roles but looking after families as they age, as the Dilnot report recognised on Monday. These women are working, and probably working harder than many of us, but not always in paid work.

Hywel Williams: The point here is the gender effect. I am subject to the whims of the electorate of Arfon and might lose my job in a few years’ time, although I hope not. A large number of women, however, have long-term caring responsibilities and do not have the ability to change their responsibilities in that way. For example, of the estimated 662,000 carers who combine part-time work with caring, 89% are female. There is a gender effect; that is the point that I wish to make and that I am sure the hon. Lady will make very ably as well.

Rachel Reeves: I thank the hon. Gentleman for his intervention, and he sums up very well why the article in the New Statesman gets it wrong in many ways. These women are working incredibly hard. Many of them are trying to juggle paid work with caring responsibilities. Many of them are caring not just for elderly parents but for young grandchildren too. They work incredibly hard, and asking them to wait for more than a year longer will throw many of them, and their plans, into turmoil.

Malcolm Wicks: Does my hon. Friend agree that this debate has got off to a good start? This is partly because it shows a serious difference of opinion between the two sides of the Committee. Government Members seem entirely relaxed—indeed, rather enthusiastic judging by their well-researched questions—about the fact that a disproportionate burden, following the deficit, falls on this particular group of women. The Opposition’s argument is that longevity has policy implications—we do not deny that and we did not deny that in Government—but the timing and proportionality has to be right. It is for Government Members to defend to the women in their constituency their enthusiasm for laying this heavy burden on a very small but significant group of women.

Rachel Reeves: I thank my right hon. Friend for that intervention. In many ways I agree there has been a good start to the debate, but in other ways I am surprised. On Second Reading there were, I believe, 24 Back-Bench contributions. Of those 24, 22 said that although they supported many aspects of the Bill, they recognised the disproportionate impact on these 500,000 women—the point that I and other Opposition Members have been making. Yet this morning, Government Members have not so far recognised the disproportionate impact on this group of women or any understanding about how difficult it will be for this group of women to adjust to those plans.
 Harriett Baldwin  rose—

Rachel Reeves: I will give way to the hon. Lady, who has 1,300 women aged 56 and 57 in her constituency. Perhaps she can explain to them why she thinks it is fair that they are disproportionately hit by the proposals in this Bill.

Harriett Baldwin: In amendment 19, birthdays on 5 April 1956 are the latest in her table and mine is only four years later than that. I have been asked in my career to extend my working life by six years—to 65 and now to 66—which is considerably longer than someone born on 5 April 1956, who the hon. Lady says should extend her working life by only one year.

Rachel Reeves: The hon. Lady either does not understand, or want to understand, that this group of women has already absorbed the increase in the state pension age, as the hon. Lady has. In total, these women will have to work for six additional years compared with what they were told before 1995. In 1995 those women were given 15 years’ notice of changes to the state pension age and that change was staggered over a 10-year period. These women are being asked to absorb what the hon. Lady has, but also an additional year or more with just five to seven years’ notice of that change. I did not have an explanation from the hon. Lady about how she will explain it to those 1,300 women in her constituency, but she has plenty of time and I hope to hear that explanation later on.

Nicholas Boles: There has been a lot of talk about this large number of women—500,000 in one category of more than a year, and 33,000 of more than two years. There is also discussion of another large group of women who have caring responsibilities in a particular disproportion. It would be helpful to this debate to hear how those categories overlap. What percentage of the 33,000 are currently not in full-time work, undertaking caring responsibilities or likely to be on pension credit? The same three questions apply to the 500,000, because the proposals the hon. Lady is making are going to cost £10 billion. Is £10 billion, through the changes suggested, the best way of helping this defined population, which is clearly much smaller than 33,000 and 500,000, which are the only figures the hon. Lady has given us?

Rachel Reeves: I am sure that, like other hon. Members, the hon. Gentleman will have read the Government’s impact assessment which sets out the proportion of women in work in different age brackets, and also the proportion in part-time work. I do not have the number of the 33,000 and 500,000 women who are carers, as that is not an analysis that the Government, as far as I am aware, have undertaken.
I have not had the privilege of meeting those 500,000 women but, as the hon. Gentleman knows, Saga, Age UK and some of the trade unions have done online petitions and in those petitions have asked people to tell their stories. That is where the Age UK yearbook “Class of 1953/54” has come from. That book sets out many of these issues. If the hon. Gentleman is saying that all this information should be available before we make a decision on what to do about the state pension age, I wholeheartedly agree. We need the information to be able to make these decisions, but instead we are asked to vote on these increases without taking into account the real impact they will have on the lives of those 500,000 women who will have to wait for more than a year before they get their state pension, the 300,000 women who will have to wait for more than 18 months before they get their state pension and the 33,000 women who will have to wait for exactly two years.
Our postbags contain evidence from our constituents, and I am sure that many of the 1,300 women aged 56 and 57 in Grantham and Stamford have written to the hon. Gentleman, so he will have an idea of the challenges that these women face—challenges resulting from ill health or caring, or from having made irreversible decisions about their working hours, or from having lost their job and having to wait before they get their state pension.

Sheila Gilmore: The hon. Member for Grantham and Stamford raises again the kind of issue that was raised on Second Reading. On several occasions, it was suggested that some form of transitional arrangement for a sub-group or part of this group who had particular issues might be provided. Has my hon. Friend heard anything further about whether there would indeed be such transitional arrangements?

Rachel Reeves: After Second Reading, I wrote to the Minister setting out what he and the Secretary of State had said on Second Reading on these points, and saying that the Opposition recognised the need to build consensus and would be willing to work with the Government and look at transitional arrangements. I was disappointed not to receive a reply to that letter, and I was hoping to ask the Minister why he did not acknowledge my letter, and whether he has any intention of bringing forward transitional arrangements. Perhaps we will come to that point later.

Nicholas Boles: The hon. Lady has been very patient with me. I fully admit that I am a newcomer to this subject, but that is one reason why I seek some simple facts. She is making an alternative proposal that she admits herself has a price tag of £10 billion, so it is incumbent on her and her hon. Friends to provide the evidence that the number of people who genuinely need that help is sufficiently large to justify her proposal and its massive cost.
The hon. Lady refers to the numbers in all our constituencies. My constituency is not a particularly rich constituency. It is not in west Oxfordshire or Surrey, but Lincolnshire, and I have to tell her that of the 1,300 women who she says will be affected by this proposal—and I have no doubt that she is right on that number—fewer than 30 have actually written to me. I am sure those 30 are just the tip of an iceberg, and that many have not written to their MP because they have not thought of it, or they do not think it will make any difference. Nevertheless, is that iceberg the full 1,300, or are some of those 1,300 perhaps in full-time work and therefore the prospect of extending their working lives—though not great, not welcome—is not impossible to imagine? Maybe some of them are married to people who are in full-time work and who have other pension arrangements, so the right thing to look at is their entire family pension arrangements not their individual pension arrangements.
We need to understand whether it is just the people who write to us who are affected so badly, or whether there are a huge number of others. Just to bandy about the figures of 500,000 and 33,000 is not good enough when one is trying to spend £10 billion.

Rachel Reeves: I thank the hon. Gentleman for that intervention. On pages 64 to 65 of the equality impact assessment that the Government published in November 2010 in relation to these proposals, it sets out labour market activity as a percentage of the population. Then it sets out the reasons for inactivity. I will take the hon. Gentleman through this information, which I am sure he has read. Of the population aged from 55 to 59, 71.3% of people are employed, compared with 78.4% of people aged from 50 to 54. Of the people aged 55 to 59, 3.8% are unemployed and 24.9% inactive. So 24.9% of people in their late 50s are inactive. If you look at that across men and women, 18.1% of men aged 55 to 59 are inactive, while 31.5% of women aged 55 to 59 are inactive. The employed includes part-time and full-time workers because the impact assessment does not break down what proportion of these women work full-time and what proportion, of the 66.1% in work, work full-time or part-time.
As for the reasons for inactivity: to recap, 24.9% of people aged 55 to 59 are inactive; 18.1% are men and 31.5% women. Of those who are inactive in their late 50s if you look at the population as a whole, 47.9% are sick, injured or disabled; 18.1% are inactive because they are looking after family and home; 20% are retired and do not want to work. However, if you focus separately on men and women you see very different statistics.
Among men aged 55 to 59, 55.8% of those who are inactive are sick, injured or disabled; 7% look after home or family and 22.8% are retired and do not want to work; whereas among women in the same age range, of those 31.5% who are inactive, 43.5% are sick, injured or disabled; 24.2% look after family and home; and 18.5% are retired and do not want to work. So 24% of those look after family and home, compared with 7% for men of the same age. We see big gaps. I agree that this is not all the information; it would be good to see more when making important decisions like this. However, we see from these limited statistics that there is a difference, as the hon. Gentleman mentioned earlier, between men and women in terms of the caring responsibilities that they take on and the differential difficulties that men and women might face adapting to these changes at short notice. There is also a difference in how they will balance—as I was saying to the hon. Member for West Worcestershire—the different types of work, not all of it paid, but work none the less, that these women take on, at home, in the family and in the workplace. I give way.

Hywel Williams: Does the hon. Lady agree that the hon. Member for Grantham and Stamford makes a persuasive and pertinent point when he says that his postbag has been light on this issue? Very few people have written to me. That is one of the reasons why these changes should not be rushed through. People are not aware of them and they will be impacted greatly by the change.

Rachel Reeves: I agree very much with that point. I told one of my close family members that she would have to wait an additional two years for her state pension. She told me, “No I won’t. My state pension has already been adjusted. Those changes have already gone through and I have to wait until I am 64.” She gave me short shrift. The next day she phoned me up again, said she had looked at the information and that I was correct.
Not everybody has as their daughter the shadow Minister for Pensions. She did not believe me—and she is my mother, but there are many women who have no idea that these changes are coming and that is an important point. I have received a large number of letters. I have fewer women aged 56 and 57 in my constituency than the hon. Member for Grantham and Stamford does, but I have received a large number of letters about it. In my role as shadow Pensions Minister I receive a lot of letters from people across the country, but that is the tip of the iceberg, not because people do not think that they can make a difference, or that their MPs are interested, but because they just do not know.
The Age UK evidence backs up that experience. It did a survey of women who were particularly impacted—more than 1,000 of them, in a focus group. Very many of them did not know about the changes. In fact, many of them did not know about the changes that were legislated for in 1995. That is a failure of Governments from 1995 until now. The reality is, giving people just five or seven years’ notice of the changes is certainly not sufficient when we are making such big changes to a person’s state pension age.

Steve Webb: I get the feeling that the hon. Lady is arguing two inconsistent points. On the one hand, she is saying that people do not know, no one has a clue, some people think that they are retiring at 60—[ Interruption . ] That was the general thrust. On the other hand, she said earlier that all these people, many of whom have taken redundancy, have made meticulous, careful financial plans that we are ripping up. They cannot both be true, can they?

Rachel Reeves: There are 500,000 women affected by these changes. The Age UK evidence suggested that around 20% of them are not clear about what their retirement date is currently. Many of them are, and the people who are making plans for their retirement, adjusting hours and taking on family responsibilities, are doing the calculations. There will be very different circumstances for all of the 500,000 women and the Minister will have had many letters, with very different scenarios. The people writing to us are the people who do know about the impact, but the Age UK evidence suggests that some people are not aware of the changes. That points to the need, as Lord Turner set out, to give people adequate notice of changes in their retirement age. At 57, most women—Age UK evidence backs this up—do know what their retirement date is. To change it so close to the time is particularly wrong.

Nicholas Boles: The hon. Lady was very helpful in reading out some of those figures. If I have remembered them rightly, she said that about 31% of women between 55 and 59 are economically inactive, and of those, roughly 40% fell into the category of sick or disabled—I cannot remembered exactly how it was defined. Does she agree that there are other arrangements—I am glad to say—in our welfare state for looking after people who are sick and disabled? If they continue to be economically inactive for a longer period of time because the pension age has changed, there is no reason to think that those women will not continue to be supported by the same arrangements, which may or may not be more or less generous, but which will hopefully be adequate to look after them.
The hon. Lady also mentioned that 20% are retired or not working out of choice. One can hazard a guess that they have family or personal circumstances that mean they are able to support themselves without support from the state. That will continue to be true; it will not suddenly change just because their state pension age has shifted. We are therefore narrowing down to a figure of around 40% of her original totals. When one suggests a change that costs £10 billion, it is worth being absolutely sure that this is the best possible way of helping the population group who actually suffer—not who are affected; we accept that the figures are right in terms of being affected—as a result of these changes. Is this really the right way to help these people?

Rachel Reeves: As I said, many of the 66.1% of women aged between 55 and 59 who are employed will be working part-time. The impact assessment does not subdivide that percentage. There are statistics that show the breakdown of part-time and full-time work for that cohort of women. Many of them will be working part-time. Many of the 66.1% will also be affected negatively and find it difficult to adjust to the plans set out in the Bill. We cannot just consider the inactive ones. Over half of the inactive women, 67.7%, are either sick, injured or disabled, or looking after family and home. Many of those will, I believe, be very adversely affected financially.
The hon. Gentleman points to other benefits, but he will be aware that the pension credit is worth around £140 a week, which is more generous than working-age benefits, and that is before the passported benefits—winter fuel allowance, bus passes, council tax help and so on—that go along with being a pensioner, that these people will miss out on for up to two years. There are very negative consequences for the 67.7% inactive people, but also for some of the people who are still in employment but perhaps working two days a week to balance the other work in their lives, such as caring responsibilities.

Lilian Greenwood: I think my hon. Friend explained very clearly why these issues are important, and the hon. Member for Grantham and Stamford also highlighted that for some people this will mean a particular hardship. I am not detracting from that argument. However, is there not a basic issue of fairness, which is that in changing the state pension age because of increased longevity, we should all pay a share of that additional cost? I have still not heard any explanation from coalition Members why this particular group of women should pay a bigger share than everybody else. Does my hon. Friend agree that there has to be an explanation, if one is possible, why this particular group of women should be asked to pay, perhaps, twice as much as many other people?

Rachel Reeves: That really gets to the heart of the issue. Everybody is living longer, but there is no evidence that women aged 56 and 57 have had something special in their water that enables them to live much longer than anyone else. However, they are the group of people who are being asked to bear the burden of this policy. The amendment sets out a way of making changes that will affect an equal number of men and women, mean that no one has to wait for more than a year longer, and give people sufficient notice.
I believe that any changes to the state pension age must be fair and must give people notice. I clearly support the amendment. However, there may be other ways that the Government can meet those criteria. I had hoped, from Second Reading, that the Government would set out what the transitional arrangements would look like for the women most impacted by these policies. I was disappointed—as I am sure many hon. Members were—that no amendments have been tabled by the Government, or by Government Back Benchers, about the transitional arrangements, because it was very clear at Second Reading that the Government did want to listen and come up with changes. It would be interesting to hear from the Minister what has happened since Second Reading to cause those transitional arrangements not to be forthcoming.
I would argue that the particular women impacted by these changes have suffered years of inequality in the workplace. Many of them have worked part-time, balancing working life with family life. Many of them were prohibited from joining a company pension scheme. Hon. Members will know that until the mid-’90s many occupational pension schemes did not have to allow part-time workers to join, so many of those women missed out on years of pension savings, and therefore have very little private saving to fall back on. In fact, the average pension savings of a 56-year-old woman are just £9,100, which is nearly six times less than that of a man. The average 56-year-old man has pension savings of £52,800—a vast difference. In fact, 48% of women aged 56 and 57 have no pension savings at all, so changes to state pension age will have a huge impact on those women, not just because of the balance between working and caring, but because that group of women have much fewer resources to draw on during that period than even men of the same age do.
Certain groups will receive an especially strong impact. As my right hon. Friend the Member for Croydon North pointed out, those with a lower life expectancy will lose a greater proportion of their state pension—which was also set out in the impact assessment—as will those who depend more on their state pension because of a lack of other savings, and those who are more likely to suffer from health problems. We have already discussed some of those issues this morning. With significant differences between different age groups, a woman born in March 1950 will have started receiving her pension at age 60, while a woman just four years younger will have to wait six years longer to receive her state pension. I do not believe that is fair.
I have mentioned the notice period. When the Conservative Government legislated in 1995 to equalise the state pension age for men and women at 65, they gave 15 years’ notice from the beginning of the change, and indeed, 25 years’ notice before the end, as it was staggered over a 10-year period. When the previous Labour Government legislated to increase the state pension age to 66 in 2007, they gave 17 years’ notice to the start of the process; 27 years’ notice to the start of the process of the increase to 67; and 37 years’ to the start of the increase to 68.
In the Bill, the coalition Government give just five years’ notice before the changes kick in. These changes kick in from 2016, just five years from now, giving much less notice than the 10 years’ notice that Age UK and the Pensions Policy Institute recommended, and less than the 15 years’ notice that the Turner Report recommended. It was also interesting that the PPI said that women probably need more time to prepare for changes in their state pension age than men, because women start to work part-time earlier than men, often to balance—as previously discussed—work and family life.
It is not just Opposition Members or the Members who spoke on Second Reading who believe the impact of these changes to be unfair and the notice period unacceptable. Dr Ros Altmann from Saga said:
“Over the next ten years, women's state pension age will increase by six years, from 60 to 66. Over that same 10 years, men's state pension age will increase by just one year, from 65 to 66. Is this fair? I am not quibbling with the concept of equalising men and women's state pension ages, but the speed of change is very harsh for women. After much talk of men's pension age rising by one year in 2016, the reality is that Government has given men a reprieve, but it is women who are paying for that by a more rapid rise in their pension age”.
Age UK has expressed grave concern that:
“Women worst affected by the Bill's proposal—that is those who need to wait two years extra—would see a loss on average of around £10,000 of state pension income. The proposed speeding up of the state pension age will start in 2016. Therefore it will affect those women who would previously have reached state pension age in above five years time. Those worst affected, who will have to wait a further two years to reach state pension age, are just seven years away from their current state pension date, and many of them are unaware this is happening. Age UK considers that 10 years is the minimum period of notice required for those affected to make changes in their pensions planning”.
Indeed, a recent survey carried out by Age UK suggests that women tend to drop out of the labour market and struggle to return to it. In 2010 quarter 1, 68% of women were economically active, which dropped to just 35% for women aged 60-64. That is set out in the impact assessment, underlining the importance of adequate notice. Only two thirds of the working-age population between 45 and 59 say that they have plans in place for funding their retirement. That will be made harder by the changes and particularly hard for the women, 40% of whom have no private pension savings.
The Bill's timetable would mean that a woman born in April 1953 will be able to get her pension at 62 years and 11 months. Yet a woman born in April 1954 will have to wait until she is 66—three years and one month difference. Many women and men affected by these changes would already have plans under way for hitting what they thought was their state pension age. I have heard from many women up and down the country who have reduced hours or given up work and taken on caring responsibilities. Those women are well on their way to retirement plans. The women hit by these changes are the backbone of our families. They are the mums who took time off work to bring up children, the daughters who are helping their parents as they get older, and the grans who are providing child care for their grandchildren to help their children balance work and family life—something which we all support. I want to ensure that Members hear and understand today what this really means for people—not the numbers and statistics that we have spent a lot of time on already, but for real lives.
Barbara Bates, who started a petition that now has more than 12,000 signatures and was presented to No. 10 Downing street a couple of months ago, says in her testimony:
“My name is Barbara and I am 56.
Since 1995, I have thought that I would retire in 2018, when I will be 64. I have based all my plans for the future on this.
I now have to wait an extra two years to retire—in April 2020, when I will be 66.
I feel robbed—robbed of 2 years of freedom, and robbed of more than £10,000 that I would have received as my state pension. The basic state pension will be my only retirement income, and I have no extra means of coping financially. I will have no option but to try and carry on working.
I agree that women and men should get their state pension at the same age, but this was already happening. There is simply no need to impose this physical and financial burden on women like me, purely because of my age.
There are 500,000 women out there who will have to work for more than a year longer, and 33,000 who, like me, will have to work for an extra 2 years.
I have osteoarthritis in my thumbs and wrists now, which makes the lifting and cleaning work in my job harder: I’m not sure how I’ll manage to the age of 66.”

Alok Sharma: I have heard the points that the hon. Lady has made this morning, but I return to the central point that there is a £10 billion hole in her proposals. She must understand that somebody will have to pay for that. Does she suggest that that £10 billion should be foisted on to future generations—in fact, the children and grandchildren of the sort of ladies she is talking about?

Rachel Reeves: I thank the hon. Gentleman for his question. I think I addressed it after he questioned me earlier.
 Alok Sharma  indicated dissent.

Rachel Reeves: For example, I posed parliamentary questions to the Minister about the increases in the state pension age to 67 and 68. Bringing forward the increase in the state pension age by one year, to 67, saves £7 billion; bringing it forward by two years saves £13 billion. If the Government wanted to look at those changes then, as I set out in my letter to the Minister, we would be willing to see how we could work together to make fairer changes that do not have a disproportionate impact on one group of people. The changes that I proposed today save £20 billion over 10 years, compared with £30 billion, but—again—there are ways to save more money. Ros Altmann from Saga has set that out, as have other people. I do not believe that the Government have looked at all the options that could be deployed to mitigate the impact on those 500,000 women.
I return to the point that my hon. Friend the Member for Nottingham South mentioned earlier: why should one group of people be so disproportionately hit by these cost-saving measures? Yes, we need to bring down the Budget deficit, but the proposals have no impact on that in this Parliament. Yes, we need to increase the state pension age as people live longer, and the changes that I set out this morning would do that. Other changes could be brought in that would save as much as or more than the Government have set out to save, without having a disproportionate impact on any particular group of people.
On Second Reading the Secretary of State and the Pensions Minister said that they understood the concerns of Members from across the House and would look at transitional arrangements for those 500,000 or 33,000 women. However, among the amendments that were circulated for us to debate today—we will hopefully debate the state pension age again on Thursday—not one was tabled by the Government looking at the transition for that group of women. If the Government really understand and want to listen, why did they not respond to the letter offering Opposition support and help in looking at transitional arrangements? Why did they say that they understood those issues if they are unwilling to bring amendments to the Committee?

Harriett Baldwin: The hon. Lady makes a very interesting and powerful case. Regarding the example that she gave, what would she say to that lady on the point she made in her opening remarks about the fact that, since the Turner report in 2004, longevity will have risen by 1.7 years for a woman in that cohort?

Rachel Reeves: It is 1.6 years, but Barbara Bates and the other 33,000 women are being asked to wait for two years before they get their state pension. 300,000 women aged 56 and 57 are being asked to wait for more than a year and a half. They are being asked to wait longer before they receive their state pension than the increase in longevity. That does not seem particularly fair to me. It does not seem fair that so much of the burden of this policy falls on this group of 500,000 women. As I have already said, my proposal gives people an adequate notice period, affects an equal number of men and women, and means that nobody has to wait more than a year longer before they receive their state pension.
I would say to women such as Barbara, “You have already absorbed an increase in your state pension age to reflect the equalisation.” She supports that and we support that, but I would also say to someone like Barbara, “That should be enough for you.” The changes should go ahead up until 2020 and then we should bring forward the increase to 66, which would affect 1.3 million fewer women, make £20 billion of savings and give people an adequate notice period. I would say to Barbara, she has already absorbed a four-year increase in her state pension age and it is not right that she has to absorb another two years with just seven years’ notice.

Marcus Jones: The hon. Lady misses the point that my hon. Friend the Member for Reading West is making. He is saying that at the end of this Parliament, once we have hopefully eliminated the deficit, this country will still be indebted to the tune of £1.3 billion or £1.4 billion. How does she think we are going to deal with that?
The hon. Lady also stressed that she wants to build consensus with the Government on this issue. She wants to forge that consensus and was hoping to do that today. If that was her true intent, why did she not table amendments that talked more in terms of transitional arrangements that the Government might have found acceptable, rather than the amendments she has actually tabled?

Graham Brady: Order. Both of those points would be beyond the scope of the amendment that we are debating.

Rachel Reeves: I am sure that the hon. Gentleman has looked at the amendments that have been tabled for this week and will see that there is an amendment about the pension credit, which is a transitional arrangement. If he thinks that is a suitable transitional arrangement, perhaps he would support it.

Hywel Williams: In the evidence that the hon. Lady read out from Barbara there was a very telling little phrase—the assumption that she will continue working. Given that assumption I have to ask, where are the jobs going to come from? There is a regional effect. For example, in Wales there are many more people seeking jobs than there are jobs available. Increasing the number of people in the labour market still seeking jobs will surely have a knock-on effect in many complicated ways. I do not think this has been given particular attention, either this morning, although we have plenty of time, or in earlier debates.

Rachel Reeves: As Barbara said in her testimony, she has no choice but to try and carry on working because, like 40% of the women impacted by these changes, she has no private pension savings upon which to draw. She has no choice but to try and carry on working. She mentioned that she has osteoarthritis. She works in a funeral parlour in County Durham and does all the cleaning there. If she were to lose her job she would really struggle to get a new job. There are many women, for example in local government where two-thirds of the workers are women, who are very anxious about what the future holds for them. Many women in the private sector are also anxious about what jobs will be available to them if they lose their job.

Cathy Jamieson: We have heard a lot from the Government side this morning, asking the Opposition what we would do in relation to transitional arrangements. Surely, given the statements by the Minister and the Secretary of State during Second Reading, the 1,200 women in my constituency who are affected would have a reasonable belief that something would have been brought forward for us to scrutinise at this stage of the process. Does my hon. Friend share my concerns that we seem to be talking around and about transitional arrangements without any idea as to whether the Government intend to bring those forward?

Rachel Reeves: Yes, I agree with my hon. Friend, and this also picks up on an earlier point. I tabled a series of amendments, as hon. Members know, but I had anticipated that the Government would also be tabling amendments to help with the transition for this particular group of 500,000 women, or the 33,000. I thought that this would be just one of the amendments that we would be debating. In reality, the only amendments we are debating on the state pension age come from the Opposition.
On Second Reading, the Secretary of State for Work and Pensions said:
“I will quite happily discuss transitional announcements with anyone who wants to do so. I do not rule out discussions, but we plan to press ahead with the dates that I set out at the beginning of the process”.—[Official Report, 20 June 2011; Vol. 530, c. 51.]
He went on to say that he heard the specific concerns about a relatively small number of women—although I am not sure 500,000 is that small—and that he was willing to work to get the transition right. The Pensions Minister said:
“I am committed to doing the same, together with him.”—[Official Report, 20 June 2011; Vol. 530, c. 128.]
My reading of that was that the Government were considering transitional arrangements, and would come back with amendments at Committee stage, which is the right point to do so, so that they could be scrutinised by us. We have 10 Committee sittings to consider the Bill. We saw from Second Reading that the most controversial aspect of the Bill is the changes to the state pension age, and I would have thought that this was the time when we would go through the Bill line by line, and look at the parts that Members on both sides of the House had difficulties with on Second Reading. I am surprised—as, I am sure, are many Members, including those who do not have the privilege of serving on this Bill Committee—that there are no Government amendments on those transitional arrangements. As I said, I wrote to the Minister on 22 June. I faxed the letter, phoned his office, and sent it by post as well. At the end of the letter I said:
“It is important that we resolve this confusion during the Committee Stage of the Bill. We are willing to work with you. I would be grateful therefore, if you could share with me the proposal that you are working on.”
I was willing to work with the Government on looking at transition arrangements. That letter has not even been answered, which is disappointing. As I said earlier, when the last Labour Government commissioned Lord Turner, along with John Hills and Baroness Drake, to sit on the Pensions Commission, we felt the need to build consensus with business, the unions, and on both sides of the House, because pensions is a long- term issue, on which we should foster consensus if we are to have sustainable plans set in place. I am disappointed that this Government are not continuing in a similar vein. As I said earlier, consensus is hard won, but easily lost. I really do want to be, and have tried to be, constructive, and the unwillingness of the Government to engage with the Opposition is disappointing. It is also disappointing that no Government amendments have been tabled.

Malcolm Wicks: To be fair to the Minister, I am confident that during the day he will find the opportunity, with the Chair’s permission, to make a full statement about the transitional arrangements that have been hinted at. I hope I am not being too naive in that belief. Time will tell. On the frequent questioning from the hon. Member for Reading West about the connection with the deficit, is it not curious that the hon. Gentleman is so gung-ho about the idea that this group of women, who have borne no responsibility for the creation of the deficit and the financial crisis, and could not have been further away from the scene of the banking crime, should bear this disproportionate burden? Does my hon. Friend have any clues as to why he makes that connection?

Alok Sharma: I would be happy to—

Rachel Reeves: This is my first Bill Committee, but I think the question was addressed to me, so I will have a go at answering it, if that is okay with the hon. Gentleman. If he would like to be the shadow Pensions Minister, I am sure that the Leader of the Opposition will listen to his request. In answer to my right hon. Friend, this does go to the heart of the issue. Yes, we do need to reduce the budget deficit, and we need to ensure that pensions are on a sustainable footing, but it still comes back to this point: why should 500,000 women bear so much of the burden of this policy and this cost-saving measure? I believe that there are ways to do this that are fairer, that give people the adequate notice period, that affect an equal number of men and women and do not require anyone to have to wait more than a year longer before they get their state pension. Saga, Age UK and others have set out ways to save money that do not have these disproportionate impacts. That is what I believe all hon. Members were asking for on Second Reading: for the Government to go away and have a look at it.
As my right hon. Friend the Member for Croydon North said, it does not seem right that this group of women should bear so much of the burden, particularly when they are so ill-equipped to deal with it. Average private pension savings of £9,100, compared with £52,800 for a man the same age; 40% of them with no pension savings at all. These women are relying on the state pension, more perhaps than many other groups of people. Not only are they being disproportionately hit, but they are a group of people who are ill-equipped to bear this additional burden.

Alok Sharma: I am an accountant by training and it is the first time I have ever been described as gung-ho by anyone. I do not know whether to take that as a compliment or not. May I clarify the point with regard to the £10 billion shortfall? I am not talking necessarily about the deficit, but clearly that needs to be controlled and the responsibility does actually lie with the previous Government to a large extent. Absolutely it does. Tony Blair made it absolutely clear in his memoirs that the structural deficit had grown significantly.

Graham Brady: Order. I have tried before to bring the hon. Gentleman back into order. It is fascinating, but I do not think we should pursue the point just now.
 Alok Sharma  rose—

Rachel Reeves: I have been very generous. I will give way as long as the intervention is on the Pensions Bill and not a question that the hon. Gentleman has already asked. Good luck.

Alok Sharma: I apologise for bringing the deficit into it. Just to clarify: the £10 billion shortfall is actually a shortfall and it has to be made up somehow. The point that I was making was that that £10 billion shortfall will be made up and paid for—unless the hon. Lady has other, more concrete, proposals—by future generations. That is the simple point that I was trying to make and I hope that the right hon. Gentleman now gets it.

Rachel Reeves: The hon. Gentleman did manage to make his question relevant to the Pensions Bill, but it was one that he had asked before, and one that I have answered already. I will do so again and maybe he will listen—with all due respect, as they say. First, we have set out proposals all outside the comprehensive spending review period. The Government have set out savings of £30 billion over a 10-year period; we have set out savings of £20 billion over a 10-year period. This, though, is for a comprehensive spending review period that has not even started yet. It is not a shortfall in that we are asking to spend additional money. We are saving £20 billion compared with £30 billion. So there is a difference between them, but it is not a shortfall in the sense that we are asking for additional money to be spent on something.
Saga has set out proposals that save more than the £30 billion that the Government’s proposals would save. I know that all hon. Members have received that briefing from Ros Altmann at Saga. Those proposals look at further increases in the state pension age and they and others could save as much as the Government have set out to save, but critically give people the notice period, affect an equal number of men and women and not require anyone to wait for more than a year longer before they get their state pension.
I urge the hon. Gentleman to look at all the facts in this case and the proposals that are fairer. I come back to the point that my right hon. Friend the Member for Croydon North makes: yes we need to increase the state pension age because of increasing longevity, but we need to do so in a way that is fair and gives people an adequate notice period. There is nothing being set out today by coalition Members, in all the questioning that I have taken, that explains why 500,000 women should have to wait for more than a year and why that is fair.
I believe that the Pensions Minister and the Secretary of State for Work and Pensions can find proposals that are fairer, give people adequate notice and do not require people to wait for more than a year with just seven years’ notice. That is what I expected the Minister to do when he came back with transition plans—something to mitigate the impact on this group of women. We all agree that we need to make pensions sustainable and to address increasing longevity, but I believe we can do that in a way that is fairer than the Government’s proposal. I hope that answers the question because it addresses how the amount that the Government have set out can be saved in a fairer way.
I told the story of Barbara Bates and I now want to tell the story of Linda Murray, who says:
“I started working at 16 and have worked ever since. For most of my working life I expected to draw a pension at 60 but accepted the increase that was established by the 1995 Pensions Act, which set my current retirement date as July 2018. I would be 64 years and two months old.
But having to wait an extra 22 months at such short notice before I can retire and draw a state pension is not something I expected or had planned for. I work in a very physically demanding job, at a dry cleaners, for 46 hours each week just to make ends meet. I have never had the means to save for a private pension. When I started work, private pensions were not readily available for ordinary workers. We paid our contributions and assumed that we would draw a state pension and that would be sufficient.
Due to my circumstances I know that full retirement is no longer an option. My plan was to greatly reduce my hours when I received my pension and return to part-time work. Now I estimate that I would need to save at least £12,000 just to be able to work part-time from the age of 64. After deductions, I take home £270 at the end of the week and am struggling like everybody else with the rising costs of living. Saving anything is impossible. I will not be able to continue working these demanding hours until the age of 66 and I am deeply worried about my future.”
The timetable proposed in the Bill is ill thought-through and the impact on a particular group of women is unfair and unacceptable. The Government have clearly become aware that the impact is unjust and on Second Reading they talked about transitional arrangements. The Minister for Pensions said:
“My right hon. Friend the Secretary of State, in his characteristically resolute way, confirmed that the Government believe that we need to equalise more rapidly and reach age 66 as the retirement age more rapidly, but he also said that he recognised that we need to implement that fairly and manage the transition smoothly. He went on to say that he heard the specific concerns about a relatively small number of women and that he was willing to work to get the transition right. I am committed to doing the same, together with him.”—[Official Report, 20 June 2011; Vol. 530, c. 128.]
What a disappointment, then, that no such “transitional arrangements” have been forthcoming. Could the Minister please explain why not? The proposal for the timetable to state pension age in this group of amendments affects 1.2 million fewer people than the proposals set out by the Government. It will affect equal numbers of men and women, and no one will have to have an increase in state pension age of more than a year. In terms of intergenerational equity—a key criterion as set by the Government in their assessment and measured as a proportion of adult life spent in receipt of a state pension—the timetable we propose has a smoother transition to the long-term trend of 32.5% for men and 34.8% for women.
Our amendments would still yield £20 billion of savings. Yes, that is £10 billion less than the Government’s proposals, but we are talking about a post-deficit world. Let us remember that this is £10 billion not as an annual hit, but over a period of years and when we get to 2016-17, GDP will be in the order of £2 trillion a year. Of course we must be fiscally responsible, but we must make balanced, informed and fair choices too. We need to be clear that the timetable for these savings will have no impact on the Government’s plan to eliminate the deficit within five years, as the savings are realised much later.
We all agree that sustainability of the pension system is also core, but not at the expense of moving the goalposts for 500,000 women just as they are about to hit the goal of state pension age in just six or seven years’ time. These amendments present a realistic compromise: they generate savings, improve the sustainability of the pension system, provide a reasonable amount of notice and do not penalise any one cohort of people.

Sheila Gilmore: It is a pleasure to serve under your chairmanship, Mr Brady. I hope that I do not go too far beyond the scope of the amendment, but I want to address the question of the £10 billion hole that it has been suggested we might encounter as a result of different proposals. My hon. Friend the Member for Leeds West has provided an answer to that within the ambit of the expenditure on pensions. When we are dealing with such matters, if we want to do something slightly differently we do not always have to find an instant answer. Government is about priorities and making choices, and the Government have chosen to make this saving in this way. One could come up with a whole number of different ways in which a sum of this nature might be found, but I would go well beyond the Committee’s remit if I started to suggest those. It is not good enough constantly to say that we have to implement these proposals, because the alternative would involve finding a certain sum of money.
The proposals alter an understanding and an expectation that has been in existence for a considerable time. The hon. Member for West Worcestershire explained how she, like many people, started her working life with the assumption that her retirement age would be 60, but that has changed. The difference, however, is the much shorter time scale, which means that people have much less time to make arrangements to deal with the change. That is the crux of the issue. Since the phasing in of the increased state pension age was agreed in 1995, many people have had a considerable portion of their working lives to work towards that understanding of when they would retire.
Some of the people whom we are discussing might not be working; they might already have had to stop work or reduce their working hours because of family or caring responsibilities. We know that the vast majority of carers in this country are over the age of 50, and many are already over the age of 60; they are caring sometimes for a partner, or sometimes still for a parent. For many of us in that age group it is precisely the time when caring responsibilities for parents kick in, because people are living into their 80s and 90s. Many people find that they have new and different caring responsibilities that they might not have anticipated. Many people describe that pressure; just as their children have grown up, a whole new set of caring responsibilities comes to light. That is something that will increase.
It has been suggested that it is all right if people in that category are unable to work as a result of sickness or disability, because other state benefits will come into play and they will still get support. We have to be aware, however, that plans are afoot to change a lot of those benefits. If, for example, a woman was unable to work at that point because of sickness, she might claim and be granted employment and support allowance, but if she is placed in the work-related activity group rather than the support category she might find that her employment and support allowance ceases after one year, because the contributory benefit will stop after one year. If she has a partner with an earned income of more than £7,500, she will not be entitled to the means-tested form of that benefit. Indeed, if she has savings that she has made for her retirement, which she has put away in anticipation of either enjoyment in retirement—there is nothing wrong with that—or for future care needs in retirement, which we are being encouraged to do, then she will not qualify for that sort of benefit. She will lose it in other things that are happening. We also have to look at the wider picture, which is often more difficult for someone who has not necessarily built up the same level of pension contribution, as my hon. Friend mentioned.
Women in the past—and I do not think it has entirely changed—have often found it much more difficult to build up the kind of pension entitlements that we would all like to see. That is partly because they have taken career breaks, which many did at some point to look after their children, or because in returning to work or working throughout, they worked in the kind of jobs that suited their other responsibilities. Many of us do that. At the same time, those are often the forms of employment that in the past—and it is not so far in the past—were not even included in pension schemes.
Until more recent legislation, some of it inspired by Europe, brought employment rights to part-time workers, there was not the opportunity to be in a scheme even if one was in employment. One did not get the chance to join, so one does not have that form of record. That is why the pension pot that many women have is so much less than the average pension pot of many men. Many of these women find themselves in a difficult situation.
While it is easy to say that it is only a small change and does not necessarily alter the position dramatically since we shall be equalising pension age anyway and everybody knew that at some point we would move on to increasing pension age to 66, it is nevertheless a double whammy to a lot of these women, who had certain expectations and understandings and who bear the brunt of this. With the relatively small adjustment suggested by this amendment that problem would be overcome. There would still be substantial savings over a period to be made from the increase in the pension age to 66 being accelerated. We have heard a lot about the difference between £30 billion and £20 billion, but it is not as if we were suggesting that we stop that altogether and do not attempt to find a substantial bit of that saving directly. However, there are other ways of dealing with this question without making it particularly difficult for that group of women.
I want to say a little about the notion that we should concentrate on those who have the greatest degree of need. We have not heard whether there will be transitional arrangements, although they were much referred to on Second Reading. Some of us felt that a number of Government Members were perhaps persuaded to vote with the Government on Second Reading because it sounded as if they had received assurances that such arrangements would be put in place.

Stephen Lloyd: Does the hon. Lady agree with my recollection that the Secretary of State said that there would be transitional agreements?

Sheila Gilmore: Indeed, I do remember. It would be interesting to see exactly what these might be. When we begin to make that the way out of a difficult problem, there are issues. Exactly how much would that cost? How would we identify those who would fall into this category? What sort of hoops will people be put through to make such applications, if they have to establish that they are a special case? Is it, first, worth it and, secondly, is it something that we really want to do? We have heard a lot in debates on welfare reform about the need to make things simpler and easier, more straightforward and understandable, as well as about the disadvantages of complex applications, for example, for certain types of means-tested benefit when people have to provide a whole range of information about themselves so that they can be assessed. Do we really want that? Is it an adequate response and is there not a danger in that situation that some women, who all seem to agree are particularly disadvantaged by such matters—perhaps more than the raw numbers—might not apply for certain concessions, might not know to do so, and might not receive that form of assistance? We are back facing the criticisms that many on the Government Benches have also made about such applications.
I submit that it is not necessary to go down such a complex road. To make such a relatively minor change within what is a substantial Government budget overall as well as a substantial pensions budget would be fair. Even when we are trying to find savings, fairness and proportionality must be taken into account. It is not all simply about adding up the numbers. Many people who have written to me and have been campaigning about such matters ask the same question. They are all well aware that the Government have choices and are able and willing to spend money on many things. I am not saying that we can pit one against the other, but it would not be impossible to achieve fairness and proportionality within a Government budget.

Hywel Williams: I also welcome the increase in longevity and fully accept that we must deal with the consequences. We must all say that before we start putting forward our thoughts. I agree with the amendments; a particular group of women are hit unfairly and the Government should be thinking about developing transitional arrangements. Women will face particular problems resulting from disrupted planning. I referred earlier to the effect on carers, and especially the lack of awareness among a large proportion of people who will be hit by the changes and who will also be facing a potential loss of income. There is also the difficulty of finding employment at any age when faced with a lack of jobs, particularly on a regional and, speaking as a Welsh Member, on a national basis. Certain matters worry me in that respect.
I agree with the hon. Member for Leeds West; such matters are unacceptable and I look forward with interest to hear what the Minister has to offer us later in our proceedings. I also agree with the right hon. Member for Croydon North about the consequences for different social classes. After all, we have known for a long time that there is a class variation for both men and women in respect of longevity and the age of effective retirement, which is also known as economic inactivity to some people. He has an interesting proposal that we shall no doubt discuss later, so I shall not stray into that territory now.
As a member of Plaid Cymru, I want to draw attention to the regional and national variation in longevity for women and whether such matters have informed the Minister’s thinking in respect of transitional arrangements that he might announce. The conjunction between class, gender and location within the United Kingdom and the effect of local job markets and the size of the public sector is complicated. A host of different factors come together. I have no particular answer to the problem. I have not cracked it myself. I see that the Minister is hugely disappointed, though I do not think he is surprised that I am not going to offer him any particular answer.
We have known for a long time that there are regional variations in longevity, for women as well as men. I do not want to burden the Committee with too many figures, but let me give some examples of life expectancy. The much quoted figures for Kensington and Chelsea show that the life expectancy of women at 65 is 26.5 more years, and in Westminster it is 24.1. At the other end of the scale, for Liverpool it is 18.4, for Salford it is 18.5 and for Blackburn it is 18.2. My particular interest is in the Welsh figures. For example, for women in Rhondda Cynon Taff life expectancy at 65 is 18.8 more years, very much in the Blackburn, Liverpool and Salford field. In Blaenau Gwent it is 18.5, and even the best figure for Wales is 22.3 years. If one looks at the life expectancy for women at 65 broken down between England, Wales, Northern Ireland and Scotland, one gets figures of 20.6 for women in England; 20.1 for women in Wales; 20 for women in Northern Ireland; and 19.1 for women in Scotland. The figures for Wales, Northern Ireland and Scotland are all below the UK average of 20.4. That is also reflected in the figures for men. Very briefly: 18 years for England; 17.4 for Wales; 17.2 for Northern Ireland; and 16.5 for Scotland. The UK average for men is 17.8 years.

Malcolm Wicks: I am following the hon. Gentleman with great interest. He mentioned the figures for Kensington and Chelsea, and alludes to Westminster. Would he also accept that within many of our towns and cities—certainly within the borough of Kensington and Chelsea—there are significant variations by location based on social class?

Hywel Williams: I thank the hon. Gentleman for that point, and I agree with him entirely. The gradient of change on a very local level is huge. With these particular figures I am drawing attention to the fact that there also seems to be a regional/national effect, which has been there, consistently, for a long time. By simple inference that will affect the debate around pensions. Life expectancy in poor localities is lower than in richer localities; that is intuitive, but also backed up by the figures. This is also true in terms of gender and class. With respect to the amendment, the particular interest is in the variation among women, to which I have already referred.
I also referred in an intervention to the employment question. There seems to be an assumption that people will work longer and that their jobs will be available. If we accept that people will work longer there will always be implications for employment. My particular problem with the Government’s proposal is that that will be accelerated for this group of women, who will be looking for jobs in areas where they are not available.
Again, I will not burden the Committee with lots of figures, but say a woman was looking for a job in the Prime Minister’s constituency of Witney—having lost hers, or perhaps having given up caring responsibilities at the age of 59, or whatever it is—I understand that there are currently three people seeking work for every one job advertised locally. If one looked at the Rhondda, and believes the hon. Member for Rhondda (Chris Bryant), it is 84:1. If you prefer to believe my figures, taking the number of economically inactive people in the Rhondda to every job advertised locally the ratio is 152:1. Those are huge figures, but I will not go into the detail of how they come about as I am sure that you would interrupt me, Mr Brady. All I am saying is that there are particular regional effects. Such regional and national effects are a question that my party has been dedicated to answering since 1925. We are not much closer to finding answers, to be frank. Our answer, applied with varying degrees of success and failure for much of that period, has been regional and national policy, implemented from here and then devolved and implemented from Cardiff, Edinburgh and Belfast during the past 12 years.
The right hon. Member for Croydon North proposed tentatively, as we shall see later, that class differences in working life and life expectancy after retirement might be factored into pension provision. No one is suggesting—I certainly am not—that we should do the same sort of thing on a regional and national basis. A phrase used in American politics is “the third rail”. Government policy trundles along happily on two rails, but anyone who touches the middle rail, which carries electricity, is dead. The devolution of pensions is a third rail for anybody with any common sense. However, if one is considering transitional arrangements, there are some things that might be done. Events in Scotland have a certain momentum, of which—to be kind—not everyone in this place is fully aware. I do not know whether that will affect the pensions debate or the benefits debate in general, but substantial changes might or might not come about.
In formulating the proposals, to what extent did the Minister take into account national and regional differences in longevity, particularly for women, and the consequences of local employment markets? Did they influence his decision at all, particularly if he announces anything vaguely like transitional arrangements? Were they put aside as being too complicated? Are they matters to be decided by others, for instance with responsibility for economic development or the devolved authorities?
If transitional arrangements are being considered, the National Assembly for Wales has developed a detailed index of deprivation, ward by ward, which has allowed the Assembly Government to target ameliorating measures at particularly deprived wards. One might speculate about the possibility of doing something specifically about the employment of women in areas where there are lots of them having difficulty finding jobs. Perhaps one could target information at areas where the lack of knowledge about the changes is high. A number of things are possible.

Lilian Greenwood: I am interested in the case that the hon. Gentleman is making about the differences in longevity between different regions, which are likely to be related to differences in social class. Does he also see differences in disability-free life expectancy, which is defined by the Office for National Statistics as
“expected years of life free from limiting long-standing illness”?
I note that the variation is incredibly broad. Figures from local authorities in England and Wales show a disability-free life expectancy at age 65 of 11.7 years for women in Epsom and Ewell and 5.3 years in Merthyr Tydfil. Will he comment on that?

Hywel Williams: The hon. Lady makes an extremely pertinent and interesting point. I will not pursue it now, but Merthyr stands out in terms of limiting long-term illnesses, particularly respiratory and heart problems. There seems to be an assumption that people after the age of 55 or 60 will be able to work and will find jobs, and that those jobs will be commensurate with their ability to perform them. The lady working in the dry cleaners comes to mind. That is a physical job, as is the job of the lady who worked in a funeral parlour. Will people aged 60, 62 or 63 be able to do that sort of thing? One rhetorical question that stood out when I read the background material was, “Are we happy to see our children being taught by someone of 67?” Being close to 67—well, not that close, but closer—I am very happy to teach children, but there are questions about people’s ability. The effect of limiting illnesses is very pertinent.
There may be steps that can be taken, perhaps in conjunction with the Assembly, the Governments in Scotland and Northern Ireland, and regionally in England, too. I look forward to the Minister’s reply.

Cathy Jamieson: It is a pleasure to serve under your chairmanship, Mr Brady, on my first opportunity to be part of a Bill Committee. I would like to make a fairly short contribution in support of the amendments.
As I said in an earlier intervention, I find it somewhat difficult to imagine where the Government propose to take transitional arrangements and what sort of scheme—we may hear later—will be outlined. It would have been more helpful to have had the opportunity to see Opposition amendments and Government amendments in advance, in order to compare and contrast, and perhaps look at securing a way forward on a consensual basis.
The constituents who have contacted me from Kilmarnock and Loudoun estimate that some 1,200 people are affected by the proposals. A range of women, some of whom have been working since they were 16 years of age, some in the same jobs or in the same companies, genuinely believed that they could plan for their retirement. They have described the proposals as a double whammy, having already had to contend with an increase in the state pension age, and are now being expected, in some instances, to work for another couple of years. Others have had career breaks, or have had to give up at various stages, either to look after children or elderly relatives. Many are now uncertain about what will happen. Much as I have real concerns about the direction of travel of the Bill, many of my constituents say that they would not be against transitional arrangements if they felt that they were fair and would help them in this particular circumstance. The difficulty that I have at the moment is that I have nothing to say to them about what the Government are putting forward.
The Opposition amendments are reasonable, rational and proportionate. They suggest a practical solution and give the opportunity for a fairer approach to ensure that the burden—there is a burden; let us not get away from that—is shared more proportionally, over a period of time, by a greater number of people. On Second Reading, we heard, consistently, speaker after speaker after speaker from a range of political parties, not just from the Opposition Benches, identify this relatively small group of women who will be disproportionately affected. I think that there was a general view across the House that something ought to be done about that.
This morning, I have heard some hon. Members suggest that the issue should be fairly straightforward, in the sense that people can simply work longer. I have also heard, however, that it is not as straightforward as that, particularly in the current economic climate and jobs market. Many of my constituents are being made redundant. They might reasonably have expected to continue working for another 10 years or so. They are not just in the public sector, although there are a number of those, but in the private sector too. There are people who will simply not have the option of working for longer in their jobs. The types of part-time employment available in constituencies such as mine, which is not dissimilar to other constituencies in Scotland and across the UK, and particularly the types available for women, have tended to have difficult working hours or involve some form of manual labour—even the care sector involves lifting, handling and other things. It is not reasonable to expect people either to transfer from a job they have had for many years into a new job without training and support or to take on such responsibilities and forms of employment at an age when they could reasonably have expected not to do so.
We heard about longevity. Some might argue that some of the health problems that affected constituencies in the west of Scotland were self-inflicted given the higher number of smokers and the higher rate of heart disease and so on, but so many of those health issues have been and are being addressed. We should welcome the fact that people are living longer, but we have to ensure that they have a reasonable quality of life. One of the issues that I feel most strongly about is the notion that when we plan pensions or look at supporting people in their later years it should be treated as a burden. Those who will draw their pensions when they get to retirement age have paid into the pot over the years. It is not something for nothing. We must change the language and stop treating it in this way.
A number of questions have been posed so far, and there were suggestions from Government Members that the number of people who would be adversely affected was very small because some might take redundancy payments or not be in work in any event. There were suggestions that my hon. Friend the Member for Leeds West should have had the facts, figures and all the information. I take the view that when issues such as transitional arrangements and the others mentioned on Second Reading are raised, it is incumbent on the Government to go away and look again at the information they have to ensure that all bases are covered. It is for them to come forward with both the required information and the potential changes. I hope the Minister can respond to that.
At this time, it would have been helpful to have more information from the Government about what their plans for the transitional arrangements are, so we could have had a much more informed debate at this stage. Given that there are Opposition amendments on the table, they should be supported. I look forward to hearing what the Minister has to say. I hope that some of the notes he has been passed this morning will allow him to illuminate us later in the debate.

Lilian Greenwood: I am pleased to speak in support of the amendment, but I must confess that, like my hon. Friends, I am somewhat surprised and disappointed that I need to do so. Given the comments of the Secretary of State and the Pensions Minister on Second Reading, I, like many others, had expected to discuss a Government amendment to the clause. I thought the Minister understood the concern expressed on both sides of the House about the disproportionate impact his proposed changes to the state pension age will have on a particular cohort of women, now aged 56 and 57, who, under the proposals, will have to wait for more than a year extra before they can access their state pension. They have precious little time to adjust to the change.
As the Whip for our shadow team, I was unable to speak on Second Reading, but as I have taken an interest in pensions over several years, I am pleased to have the opportunity to address a number of issues today. The first is on why the proposals are unfair and in need of amendment. First and foremost, there is a lack of adequate notice. I know that I do not need to tell the Pensions Minister how important it is to get people thinking about their pension many years ahead of their retirement. I am sure that he agrees that when we ask people to plan years, and indeed decades, ahead, it is vital to provide them with the stability and certainty to do so. He said as much himself in October 2009:
“Pension policy needs to be stable and predictable years ahead, not made up on the back of a cigarette packet.”
He was actually commenting on the Conservative plans then in place to bring forward by a decade the raising of the male retirement age from 65 to 66. He does not seem to be following his own advice. Instead, he is springing these changes on women in their late 50s without giving them a realistic time scale in which to make preparations for the loss of pension payments that they had earned and expected over many years.
My constituent Angela Woolley expected to have to work to 64 years and nine months after the 1995 changes. She accepted the extra four and three quarter years as bad luck and the result of being born at the wrong time. At least, though, she had plenty of notice of the change. Now she will have to wait until she is 66 to receive her state pension—an extra 15 months. She describes that extra year and a bit as “a liberty too far”. She said:
“I have worked constantly since leaving school at 15 with only a six month break for maternity leave, fully expecting the Government to keep their part of the bargain.”
For her, the claim that we are all in this together rings hollow. As she says,
“Some of us are clearly in it deeper than others.”
Angela is right to feel aggrieved, because she had done exactly what we want everyone to do: she had saved for her retirement, making contributions to a small private pension scheme. What sort of message does it send to younger women or men when they see people such as Angela, who have done the right thing, having the rug pulled out from under them by this Government? Angela is not the only one in such a position. There are probably 2,500 women in Nottingham affected by the proposals.
I want to talk about another constituent of mine. Lorraine Smedley worked for the NHS for many years. Having put aside some savings, she decided to take a part-time job as she moved towards her expected date of retirement.

Andrew Bingham: I have listened with interest to what the hon. Lady says about her constituent who has that extra time to work. Do not Opposition Members understand what damage was done to the value of constituents’ private pensions by the removal of the tax by her Government in 1997? How does that affect the ability to fill in that shortfall?

Lilian Greenwood: If my constituent had wanted to raise concerns about her private pension, I am sure that she would have done so. However, that is not the issue that she is concerned about. She is concerned about the extra 15 months that she is being asked to work.
Let me now talk about my constituent, Lorraine Smedley. As I say, Lorraine took a part-time job when she moved towards her expected date of retirement. She had worked out that she could supplement her part-time wage until her retirement. She told me:
“I thought I was close enough to my retirement age to know where I stood.”
Now she says she does not know what to do. Working an extra 15 months before she receives her state pension is not a prospect that she relishes. Her job as a community care assistant is physically and emotionally demanding, and she is not sure that she will be able to continue. The prospect of claiming state benefits is anathema to Lorraine. She has been determined to pay her own way all her life. Having left school at 16 and paid into the state pension pot all those years, she feels that she should not have to rely on benefits.
Some of the women in Nottingham face even longer than 15 months’ wait for their pension. Patricia Webber is among those who are the hardest hit by the proposals. Born in June 1953, she is among the 33,000 women who will have to wait two years extra to get her state pension. She understands why things have changed over time. She was in favour of equalisation. She understands that the population is ageing and that changes need to be made, but she rightly asks why just one small group is being singled out. Patricia says:
“I was aware that I would be 63 years four months before I was eligible to claim the state pension. I was prepared for this and feel that this is enough to ask of anyone.”
Like so many of the women whom we are discussing, she is trying to prepare for the extension, but at such short notice, it feels like an impossible task. Patricia says:
“I am saving extra, but the present low interest rates and rising cost of living mean that little headway is achieved…It is difficult to cope in ever changing circumstances…I feel that we women of this age group were just expected not to make a fuss—an easy target.”

Stephen Lloyd: On that specific point, and to allude to what I said to a colleague earlier, does the hon. Lady not believe that the Secretary of State will implement a transitional arrangement?

Lilian Greenwood: I thank the hon. Gentleman for that intervention. Frankly, I do not know the answer to that question. I certainly hope, given the Secretary of State’s comments on Second Reading, that he intends to implement transitional arrangements, but sitting here in Committee, with the amendments before us, we do not have any Government amendment that aims to do that, so I am somewhat perplexed. Patricia and her colleagues in the class of ’53 have quite rightly made a fuss and have gained support from across the House, and I shall return to that in due course.
The second reason why the proposals are unfair and require amendment is because they lead to one group being asked to bear an unfair share of the burden. According to the Department’s impact assessment, the proposals in the Bill, under which the state pension age for men and women will increase from 65 to 66 between December 2018 and April 2020, will affect around 4.9 million people—2.3 million men and 2.6 million women. Around 300,000 women will have to wait an extra one and a half years or more, while no man will have to wait for more than 12 months. The impact assessment considers a second option, which is exactly what the amendment is calling for. Option two would affect 3.8 million people in total, but women and men would be affected in equal measure. No one would have to wait more than a year to receive their pension, and everyone affected would have longer to prepare for the change.
The assessment explains the decision to reject option two, saying that it is
“hard to justify in view of the significant upward revision in the life expectancy of those reaching age 65 over the next decade, and the consequential fiscal pressures. Those benefiting from increased longevity should share in the associated costs”.
I do not disagree that as we live longer, we need to pay more towards our income in retirement and/or work longer. Like many other people, when I was in my previous pension scheme, we made revisions to our contributions rate and changes to the length of time that we would have to work before we could receive our pension. People accepted that, because they understood that we are living longer, which places a greater burden on our scheme. The women who have written to me do not disagree either—they understand that they may need to work longer. The key phrase, surely, is
“share in the associated costs”,
and the key issue is how we ensure that those shares are fair.
The Minister has simply not explained—he will have the opportunity to do so later—why 300,000 women have to pay a bigger share than anyone else, particularly when we know that they are not well equipped to bear a greater share of the burden.
The third reason is that the proposals break a promise made by the Government just 12 months ago. The women affected by the proposals have already seen their state pension age go up by three, four or five years under the Pensions Act 1995. They had more than 15 years’ notice of that. As many have commented, they also had time to adjust their retirement and saving plans to cover the extra period. Now the Government want to hit the same group again, but this time much harder and with woefully inadequate notice, having said in the coalition agreement that while they agree to
“hold a review to set the date at which the state pension age starts to rise to 66…it will not be sooner than 2016 for men and 2020 for women.”
No wonder so many of the women affected say that they feel robbed.

Malcolm Wicks: I have listened to my hon. Friend with great care. I suppose the reflection is that past Governments’ decisions about how to raise the pension age and move towards equality between the genders have met with remarkable acceptance because of the long time scales, whereas there was rioting in France about the inalienable right to draw one’s pension at 60. The worry now is that that consensus will give way to conflict because of the way in which the Minister wishes to rush the measures through for that group of women.

Lilian Greenwood: I thank my right hon. Friend for that intervention. He is absolutely right. When we look at pensions—or indeed any long-term planning changes, such as those regarding care for the elderly, which we are looking at—it is desperately important that we try to build consensus.
I want to turn to why the unfair burden on women will be hard for them to bear. We have heard that women’s pension age is rising by more than men’s—up to two years in some cases—and that they are being given less notice, with as little as six years’ warning of a two-year change. The women affected are much less financially secure than men, and therefore much more reliant on their state pension. Department for Work and Pensions figures show that 40% of them have no private pension wealth, and if women do have pension savings, they are likely to have far smaller amounts than men. The gender pay gap has narrowed somewhat, but on average women still earn significantly less than men and are therefore much less able to save. If women have been fortunate enough to be in an occupational scheme, even a defined-benefit one, their pension will be lower because their benefits will be based on their salary.
Many women in this group will have taken years out of the labour market to care for children, and that will have affected their contributions record. They might have worked part time, and as a result may not only have earned and saved less but perhaps, until the mid-1990s, been excluded from occupational pension schemes. The Department’s own figures confirm the impact of such factors: men have on average eight times more valuable pension assets than women.
Women are also less likely to be able to make changes to cover the extra delay. They are much more likely to have already retired, perhaps to care for a partner or for parents, as many of my colleagues have mentioned, and 37% of women aged between 56 and 60 are not working and will therefore find it hard, if not impossible, to be in work. If some of them did return to work, assuming they could find a job—many Members have already spoken about the difficulties they would have in doing so, particularly in certain areas of the country—it is likely that the Government would have to pick up the even bigger cost of the caring duties the women were no longer able to carry out. Perhaps the Minister can say more about why he believes that it is fair for this particular group of women, who are ill equipped to cope with additional financial demands as they approach retirement, to be asked to pay a greater share than everyone else.
I want to ask the Minister about a couple of other groups. The first, which I think has been mentioned by my hon. Friend the Member for Leeds West, was raised by the hon. Member for Chippenham on Second Reading. He expressed the view that the Government have a particular responsibility to former Government employees who have recently taken early retirement—he said “instead of redundancy”, but it could just as easily have been redundancy—and now find that they will not have access to a state pension, even though such access might have been part of their plans when deciding to leave their employment. When my hon. Friend the Member for Leeds West raised the issue, the Minister asked her how many people were affected, whether it was 10 or hundreds or thousands. I do not know the answer, but no doubt he is in a good position to tell us how many civil servants have taken early retirement or redundancy in recent years, how many of them fall into this category, and how many are women aged 56 and 57. I would be grateful if he could give us those figures in his response. We all know, from our constituencies, that many other workers, particularly but not just in the public sector, have recently taken early retirement or had to accept redundancy because of the downturn, and have done so taking into account the existing state pension age.
Another group for which carrying on working might be difficult is public servants working in local government. This is something of a niche area, but the issue has occurred to me, so I will mention it. The majority of local government workers—probably about 75%—are women, and the age profile in the sector is skewed towards workers in their 40s and 50s. All local authorities have been reviewing their pay and grading structures in recent years to ensure compliance with equal pay legislation, and after any such exercise, some employees go up the grading structure, some go down and some stay in the same place. Experts in such matters might tell us that usually a third of the workers are in each category. In my experience, one of the biggest concerns for local authority staff, particularly those who are approaching retirement, is the protection of their pension scheme if their job is downgraded. Local authority staff are usually members of the local government occupational pension scheme. Normally, they would have some reassurance, because the final salary on which their occupational pension is based is an average of the three best consecutive years in the last 10. Therefore, as long as they are within a few years of retirement, they will not suffer a significant loss of pension, even if they take a drop in pay.
I am concerned that many women will be in that group. They will have had their job downgraded and will have a pension protected for up to 10 years. They will be affected by the change in state pension age, but they will need to retire as they had planned to protect their occupational pension; otherwise they will face a gap before they can claim their much-needed state pension. Given that the average occupational pension for women in local government is less than £4,000, they clearly will need their state pension to protect them in retirement. What account has the Minister taken of those women in his proposals?
I want to return to my disappointment that the Minister has not tabled his own amendments to the clause. On Second Reading, we heard many Government Members raise concerns on behalf of the 33,000 or 300,000 women who will be hit particularly hard by the proposals, and who will have to wait 18 months or two years extra for their state pension. The hon. Members for Epping Forest (Mrs Laing), for North Wiltshire (Mr Gray), for Argyll and Bute (Mr Reid), for Cardiff North (Jonathan Evans), for Cardiff Central (Jenny Willott), for Mid Dorset and North Poole (Annette Brooke), for Ipswich (Ben Gummer), for Gloucester (Richard Graham), for Salisbury (John Glen), for South Dorset (Richard Drax) and for Edinburgh West (Mike Crockart) all expressed concern and hope that the Minister would think again. It is disappointing and perhaps a little surprising that none of the hon. Members who made such thoughtful and interesting interventions and speeches on Second Reading are Bill Committee members.

Malcolm Wicks: Why is that?

Lilian Greenwood: Indeed, many of them did not just express a wish that Ministers would address the issue, but were confident that they would. Particular faith was expressed in the Minister responsible for pensions. The hon. Member for Cardiff Central said:
“I put him on notice today that I trust him to resolve the issue. I am sure that, if he cannot do it, nobody can.”—[Official Report, 20 June 2011; Vol. 530, c. 74.]
I wonder how she feels today as she looks at the list of amendments tabled and sees nothing from the Government to address those concerns. Does she perhaps feel that her trust was misplaced? Why have the Secretary of State and the Minister, who made such reassuring noises on Second Reading about considering transitional arrangements, not tabled any proposals for us to discuss? When the Minister summed up, he noted that the Secretary of State had recognised that the implementation needed to be fair and smooth and was willing to work to get the transition right. The Minister said that he was committed to doing the same. When will he explain how he intends to do that?
Finally, I want to highlight that when we talk about the state pension, we are not just talking about the weekly pension of £97.67 per week—although I appreciate that by the time the changes take place in 2018, that will be somewhat higher. As I said earlier, when someone reaches state pension age, they also receive a number of passported benefits, including winter fuel allowance, free bus travel, free eye tests, free dental work and free prescriptions. All of those are contingent on reaching state pension age. One might anticipate that a woman—or indeed a man—waiting an extra year for their pension would lose out to the tune of around £5,000 a year, but the actual cost will be much higher. Of course, those who have no savings—we know that is 40% of the women whom we are talking about—will also miss out on access to state pension credit.
In 2009, the Minister said it was typical of Tory policy to hit the poorest hardest. I know that the Lib Dems would like to paint themselves as a moderating influence on their coalition partners, so perhaps the Minister can show that he is a moderating influence today by accepting the amendment.

Malcolm Wicks: I am still shocked that the radical voices on the Tory Benches are not on this Committee. Given the Executive’s respect for the legislature, I am almost speechless. [Interruption.] Government Members have, at this stage, found their voice! It would be unfair to suggest that the Government side of the Committee is packed full of trusties and would-be prefects; I cannot believe that that is true. I am sure that Government Members will find their voice and speak up for the women of Britain before too long.
On Second Reading, I made the point that Aneurin Bevan once said that ageing was the peculiar problem of this century. I refer to Aneurin Bevan partly because, as you know, Mr Brady, today is the 63rd birthday of the national health service. That is a key social policy institution that at least one party here—possibly two—have celebrated for 63 years, and not just in recent years.

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Four o’clock.